Celsius Energy - Fallen Angel
Is there a clear competitive advantage for Celsius in the domestic market, its products? I have been rethinking this question after listening to the earnings call and I believe it does not. Yes, its drinks are popular sugar free trend leaders and customers like the brand and the flavors and it sets itself apart from competition. But the market dynamics is changing and we have to look forward, the market is an impact system not a straight line to fairy town.
Red Bulls are fighting back, new brands are entering, is it really that different between flavors? Like Coke? Talking about marketing, how different can it be from that of Red Bull, they have bigger budgets too. Celsius does not have a durable competitive advantage. Period. I was attracted to it because of the fallen angel story. It has gone down so much and I was hoping to catch a rebound. But in this case it’s not. The current valuation is still not cheap enough for a business that is about to face more competition and pricing pressures as consumers get weaker. A 4.5 dollar energy drink in convenience channels is just too expensive. They have taken pricing too far, for all the categories during covid. Celsius can defend its market share and potentially gain some, but it’s going to be a hard battle.
